Coffee Futures Closed Slightly Higher Arabica futures settled modestly higher Wednesday. The most active contract for July delivery closed 90 points higher at 197.55 cents a pound. The activity was dominated by switches as volatility attracted good speculative participation. Volume reached 43,812 lots including 10,211 switches. The July/Sept switch ended at 1.35 after trading in a 1.15 /1.40 range. The market is developing a base near these levels. Short profit taking and the proximity to an important area of support that make less attractive speculative selling have been noted during the last two sessions. Open interest decreased 3,806 lots as of yesterday reflecting the profit-taking. A recovery of both Robusta and the cocoa market added some support to the coffee futures today. Fundamentally, the market will remain focused on the harvesting of Brazil’s crop and the weather in Vietnam. Also, according with reports adverse weather in Indonesia could impacts yields. In the coming weeks, the USDA will continue to publish their attaché coffee reports, which will be the first forecasts for the 2024-2025 crop. Commodities were mostly lower today. Brazil’s Central Bank will announce their interest rate decision later in the day. In March, the central bank of Brazil reduced its key Selic rate by 50 bps to 10.75%. Expectation is that another reduction of a quarter-point will be announced.
Brent Crude Oil fell 0.63% to 82.64 and Spot Gold Futures also ticked 0.10% lower to 2,311.84. Cert stocks declined 13,750 bags to 687,673 bags. Pending grading added 1,085 bags to 119,937 bags. Robusta Jul24 contract settled at $3,414 with a 3449/3330 range. With the speculative long liquidation taking a breather the market was able to find some sort of equilibrium. Roster buying was noted in light volumes, with them already putting on a fair amount of cover over the recent sessions not as much interest was shown today. Origin selling was noted by a total absence. Volumes were half that of yesterday with only 10k lots trading on the JUL24 contract. Structure remained inline with a 70/80 range on 3.4k lots. Robusta Sep24 3725/3025 fence (to the call) traded 1500x @ 0, Robusta Sep24 3700 calls vs 3305Δ30 traded 500x @ 1287.
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Arabica Consolidates, Robusta Adjusts Down
Arabica futures ended higher on Tuesday as the recent fund liquidation appears to have eased reaching a more suitable level. The July contract settled 145 points higher at 196.65 cents a pound. Early selling put some pressure on the prices, however the market recovered after it failed to attract solid selling. The proximity to a support area and over sold conditions discouraged shorts to add positions, at the same time encouraging short term players to reverse positions. The open interest increased by 1,146 lots as of yesterday, confirming new shorts entering the market. The 194/192 level on the July chart reversed roll offering now good support after a strong resistance area since last January was in place. Fundamentally, the market will remain focused on the harvesting of Brazil’s crop. So far, the dry weather is anticipated to contribute with the harvest and no delay are expected. Preliminary data showed that the country’s coffee exports were 66% higher in April year on year, although official data from CeCafe will not be released until Monday. Cert stocks increased by 14,465 bags to 701,423 bags. Pending grading down 875 to 118,852 bags. A total of 16,065 bags were graded. Passed 14,465, failed 1,600. Robusta Jul24 contract settled at $3,378 with a 3440/3261 range. Market gapped $113 lower this morning with non-commercial long liquidation being the name of the game. With London being shut Monday and NY trading 5.5c lower this was a trigger for big MOO sell clips to come into Robusta. Commercial buying was noted in light sporadic volumes, very similar to previous sessions. Outright volumes were impressive with over 21.5k lots trading on the Jul24 contract alone. Structure remained fairly in line with Jul/Sep seeing a 69/82 range on 5.4k lots. Option market was also extremely busy with highlights shown: Robusta Jul24 3800/3200 fence (to the put) vs 3375Δ50 traded 4000x @ 43, Robusta Jul24 2600 put traded 2100x @ 8, Robusta Jul24 4000/3600 putspread vs 3375Δ22 traded 2000x @ 334, Robusta Sep24 3500/4100 callspread vs 3305Δ24 traded 11000x @ 123. Arabica Coffee Futures Arabica Extend Losses. Robusta closed on Holiday
The New York coffee “C” markets closed lower on Monday mostly driven by speculative selling on technical weakness. Algorithm and computer systems joined the selling wave. The most active contract for July delivery lost 5.50 cents to settled at 195.20 cents a pound, the lowest since April 1st. The breach of the 200 level was a major disappointment for long players who were expecting a bounce from what could have been a base formation, which is now doubtful. The nearby switch (July/Sept) fell 45 points, adding pressure to the prices today. The open interest dropped 5,209 lots as of Friday, evidencing the massive funds liquidation. Fundamentally, the market will remain focused on the harvesting of Brazil’s crop and if any changes to yields are expected compared to forecasts which were issued earlier in the developmental cycle (usually around flowering time). In the coming weeks, the USDA will continue to publish their attaché coffee reports, which will be the first forecasts for the 2024-2025 crop. In June, both StoneX/CoffeeNetwork and the USDA will reveal their estimates for global supply and demand. CECAFE will release the Brazil’s export data next Monday May 13th. Commodities were mostly higher today. Brent Crude Oil rose 0.68% to 83.52 and Spot Gold Futures gained 1.17% to 2,328.76. The Dow Jones Industrial Average rose 0.34% to 38,807.73 and the Stoxx Europe 600 Index was last seen at 507.8, up 0.45%. Certified stocks decreased 2,220 bags to 686,958 bags. Pending grading increased 32,220 bags to 117,977 bags total. No grading done today. Coffee Futures Suffer Sharp Fall
Arabica coffee futures extended losses on Friday as funds continued to exit the marketplace. The most active contract for July delivery settled 5.35 cents or 2.6% lower at 200.75 cents a pound. The open interest dropped 2,723 lots yesterday, reflecting the exit of funds. The Arabica market lost 23.25 cents during the week or 11.4%, the largest weekly loss since July 2021. The specs selling have been triggered this week, as the important levels of support have been violated by the prices. A general weakness of the commodity complex adds the bearish sentiment. Arabica cert stocks increased by 7,142 bags to 689,178 bags. COT(CIT) NY Arabica . Non-commercials cut net long position by 1,728 contracts to net long 48,973 in week to April 30. In London, the Robusta market closed sharply lower. The active July position settled $139 or 3.6% down at $3,541 per ton. A hefty fund liquidation pressured the market that lost 18% from last ‘s week historic high. Overbought conditions and reports of some rains in Vietnam caused the selling. This has naturally seen the algorithms track momentum lower trigger stopped a key resistance areas and eroding heavy roaster buying on route to the intraday lows. Technically outlook would still allow further losses, but participants will focus on oscillators nearing oversold conditions as we touch the lower Bollinger band averages. Arabica coffee futures fell significantly on Thursday influenced by a substantial drop in Robusta prices in London. The drop accelerated after prices fell below the lows of the previous two sessions, attracting sales from speculators and triggering selling stop orders. The most active contract for July delivery at the ICE exchange in New York, closed 9.90 cents or 4.5% lower at 206.10 cents a pound. The volume increased reaching 57,435 lots. Likewise, the volume of switches was high in 14,154. The fall impacted the nearby July/September switch which lost 20 points ending at 1.75 cents and the forward curve which lost backwardation but remains inverted. Players have been adding shorts as the market failed to recover. The open interest increased 2,319 lots as of yesterday. The continue sell-off of the cocoa market added bearishness to the soft complex. Cocoa prices have lost 29.99% or $3,241 to $7,563 so far this week. The dollar retreated as focus returned to chances of interest rates to be cut or staying higher for longer time. Cert stocks increased 14,660 bags to 682,036 bags. Pending grading decreased 21,305 bags to 58,715. Today a total of 21,580 were graded, 14,735 bags passed and 6,845 failed.
Robusta Jul24 contract settled at $3,680 with a 3999/3620 range. No other way to describe todays activity other than a total collapse, $379 range. A move like this outside of weather markets is unheard of. Essentially the hedge lifting stopped and the recent roaster interest had eased which forced the speculative community to liquidate into a total vacuum. Sporadic commercial buying was defiantly noted but due to the fact there was very little ‘’resting’’ bids there was nothing there to absorb the relentless speculative bailout. Volumes were good for Robusta with over 25k lots trading on the July contract alone. Nearby structure weakened a touch seeing a 56/70 range on nearly 7k lots. Robusta Jul24 3500 puts vs 3780Δ25 traded 1000x @ 75, Robusta Nov24 3500/3000 putspread traded 750x @ 220, Robusta Jul24 4000 calls vs 3800Δ35 traded 750x @ 132. Arabica coffee futures consolidated lower Wednesday on eased volatility after the previous wild session. EU and Latin America holidays contributed to the slow day. The active contract for July delivery closed 65 points lower at 216.00 cents a pound. Volume reached 46,177 lots including 11,904 switches. The nearby July- September switch gained 10 points premium to end at 1.95cents. Today it traded up to 2.10 near recent highs. The market structure has again gained backwardation to the extent it appears predicting that the physical tightness could be prolonged given the Robusta situation in the global supply/demand balance. The dollar was firm during the session as market’s participants were awaiting the FED's announcement on interest rates. As expected, the FOMC kept rates unchanged at 5.25%-5.50 % range. However, the FED signaled it is still leaning towards eventual reductions of the rate, but noted recent disappointing inflation data could cause a delay on the decision. Cert stocks increased by 7,618 bags to 667,376 bags. Pending grading down 6,243 bags to 80,020. Graded today: 9,678 bags. Passed 7,618 (2,233 BR, 4,560 NI, 825 PE). Failed 2,060 (960 BR, 1,100 PE)
Robusta Jul24 contract settled at $3,978 -43 with a 4058/3955 range. Another sluggish session with a new recent low printing. It seems although rumours still circulate around the fundamental situation this is not having a great impact on flat price. Commercial participation is sporadic with light scale down buying seen and virtually zero origin selling. With no fresh news momentum slows and short term specs start to sell. This lack of commercial interest is reflected in the poor outright volumes, only 10,205 lots traded on the most active Jul24 contract. Structure weakened a touch, Jul/Sep saw a 70/84 range on 3k lots. Robusta Jul24 4500 calls vs 4016Δ22 traded 750x @ 72. Arabica coffee futures settled higher on Monday supported by the Robusta market and the constructive technical outlook. The active July contract finished 3.50 cents higher at 227.50 cents a pound. Despite some rains in Vietnam, reservoirs used to irrigate crops in Central highlands are critically low and rains should develop before May 15 to avoid irreversible damages to the crops. Activity was light reflecting the absence of commercial activity. The volume reached 29,750 lots including 6,969 switches. Technically, a double bottom formation tested on Friday, and the breach of the short-term down trend could indicate a possible return to the recent highs. Commodity prices declined today. Cocoa suffered another blow as prices fell 14% to end at $9,150 per ton. Certified stocks increased 4,695 bags to 661,352 bags. Pending grading also increased by 4,515 bags to a new total of 60,719. Today a total of 4,820 bags were graded (3,995 BR, 825 HN), all of them passed. No bags failed grading.
Robusta Jul24 contract settled at $4164 with a 4239/4137 range. Market continues to operate at the lower end of the recent range with very little commercial interest. Sporadic roaster buying was seen scale down. Despite the softer market talk continues to circulate about issues in Vietnam and production / output which is providing support to flat price. Jul/Sep saw a 72/95 range on only 1.8k lots. Robusta Jul24 4000/3600 putspread vs sell 5000 call vs buy 4200Δ36 traded 1500x @ 58, Robusta Sep24 2800 puts vs 4105Δ3 traded 1000x @ 12, Robusta Sep24 3500 puts vs 4105Δ20 traded 1000x @ 101. Arabica coffee futures settled lower Friday but recovering partially from early heavy losses. The market was under pressure on spec selling that extended from last night following the announcement of an increase of initial margins in London. In addition, reports of rains in the Dahlak region of Vietnam added weight on the Robusta prices. The most active “C” contract for July delivery at the ICE exchange in New York ended 4.10 cents or 1.78 % lower at 224.00 cents a pound. Volume reached 37.014 lots including 10,350 switches. Dollar strengthened today after US inflation data for March reinforced perception the Federal Reserve will delay interest rate cuts. During the week, Arabica lost 3.38% or 7.85 cents. Profit taking and technical driven selling contributed to the down move at the same time as the recent commercial buying eased. The volatility declined after the FND on Monday. Cert stocks were down 4,835 bags to 656,657 bags. Pending grading added 5,230 bags to 56,204 bags. No grading on Friday.
COT (CIT) Non-commercials decreased their long position by 3,666 lots to 69,040lots long and decreased their short position by 938 lots to 18,335 lots short, with a net long position of 50,705 lots in the week to April 23rd. The London terminal finally gives some ground ending the session over 3% lower as the recent roaster fixations and hedge lifting slows. The contract for July delivery closed at $4151 -153, trading in a range of 4132/4303. Without these buying elements upside momentum stalled and encouraged the systematic players to shift from long to short, which drove values into a vacuum triggering stop below the previous low. Whilst most participants would not turn bearish after a one-day event, the nearby technical outlook would favour a retest of the old congestion area resting marginally above $4000 basis July24. Arabica coffee futures closed with strong gains Wednesday. The firm Robusta market remains as a major factor adding the bullish sentiment. Commercial buying ahead of the first notice day for the May position was significant today. With only two days left commercial price fixing has boosted the market. The contract with the most activity for July delivery ended with gains of 1,120 points or 4.9 % at 240.35 cents a pound. The volume reached 74,220 lots including 22,957 switches. The technical strength attracted speculators and funds buying too as they perceive a situation that could be parallel to that of the cocoa market, which has risen more than 150% this year. In the technical part, previous patterns on the charts, suggest the next objective against the 243/245 area, highs of Sep 2022, and later against 250/260. The market seems to continue disconnected from macro factors such as the weakness of the Brazilian real and the Colombian peso. Certified stocks rose 7,375 bags to 630,856 bags. Those pending certification increased by 1,035 bags for a total of 57,848.
Robusta Jul24 contract settled at $4195 +218 with a 4206/3952 range. A new absolute high basis 2nd month, taking out the previous $4,140 high in Sep 1994 (5 MT contract). We are currently facing a financial squeeze on the commercial sector with runaway flat price and a stagnant physical market. This leaves participants unable to get hold of product, and what is available is extremely expensive. Rumours of a very large commercial player buying in the physical space today caused prices to rally (in very large quantities). Shorts continue to cover with the total absence of a natural seller meaning we just trade through vacuums of liquidity. Volumes reached nearly 43k lots total. Robusta Jul24 5000 call traded 1000x @ 65, Robusta Jul24 3800 puts vs 4094Δ30 traded 1250x @ 130. The Arabica coffee market closed higher today after a highly volatile session. The most active contract for July delivery closed 640 points or 2.9% higher at 226.85 cents a pound. Once again, the strength of Robusta prices drove the rise of the New York “C” marking. In an extension of Friday's action, prices were under selling pressure after the open. Contributing to the bearish sentiment, the COT data released on Friday also influenced the early trading as traders felt that the funds could be overloaded with long positions. The funds' long position has reached record levels of 68,839 lots as last Tuesday as reported by the CFTC in its weekly COT report. The strength of other soft complex raw materials added support. Cocoa remains firm trading above $11,000 per ton. Certified stocks fell by 15,105 bags to 624,545 bags. Pending certification rose by 1,675 bags to 66,079 bags. Today a total of 5,415 bags were graded. 5,130 bags (BR 855, NI 4,275) were approved, while 285 (NI) failed
Robusta Jul24 contract settled at $3949 with a 3975/3805 range. Market was dragged lower in the early part of the session largely down to the selloff in KC which seemed to be a COT reaction if anything. However, as the day progressed, we continued higher with a lot of the early shorts covering push prices higher. Once the US came online, we pushed through the highs and normal service resumed with limited commercial selling absorbing the speculative and roaster buying. Volumes were high with over 16k lots trading on July alone. Structure weakened with May/Jul trading 13/52 range of circa 6k lots. Robusta Jul24 3800/3600 putspread vs 3930Δ12 traded 1100x @ 79, Robusta May24 3500 put traded 1000x @ 1, Robusta CSO May24/Jul24 50 call traded 1000x @ 6 |
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